Equinix: Equinix to Post Q1 Earnings: What's in Store for the Stock?

In This Article: Equinix, Inc. EQIX is scheduled to report first-quarter 2025 results on April 30, after market close. The company's quarterly results are likely to reflect year-over-year growth in revenues and adjusted funds from operations (AFFO) per share. In the previous quarter, this Redwood City, CA-based data center real estate investment trust (REIT) reported an AFFO of $7.92 per share, missing the Zacks Consensus Estimate of $8.11 per share. Its quarterly results reflected higher non-recurring charges, undermining the performance. However, steady growth in colocation and interconnection revenues, led by strong demand for digital infrastructure, supported the results to an extent. Over the preceding four quarters, EQIX's AFFO per share surpassed the consensus estimate on three occasions and missed once, the average beat being 2.43%. This is depicted in the graph below: Equinix, Inc. Price and EPS Surprise Equinix, Inc. Price and EPS Surprise Equinix, Inc. price-eps-surprise | Equinix, Inc. Quote Factors at Play for Equinix In the first quarter of 2025, Equinix is likely to have benefited from the solid demand for interconnected data center infrastructure. Enterprises and service providers' continued efforts to integrate artificial intelligence (AI) into their strategies and offerings and advance their digital transformation agendas are likely to keep demand up in the upcoming years. Moreover, the demand for Equinix's interconnected ecosystem remains strong, driven by an acceleration in enterprise cloud adoption and increasing cloud or Internet customers' demands for highly interconnected data center space. The company's recurring revenue model, which comprises colocation, related interconnection and managed IT infrastructure services, is expected to have supported stable cash flows in the to-be-reported quarter, boosting the data center REIT's top line. However, high interest expenses due to a substantial debt burden might have undermined its quarterly performance to some extent. Q1 Projections for EQIX The Zacks Consensus Estimate for colocation revenues is pegged at $1.52 billion, suggesting growth of 2.3% from $1.49 billion in the prior-year period. The consensus mark for interconnection revenues is pegged at $395 million, indicating growth of 7.2% from $368 million in the prior-year period. For the first quarter of 2025, Equinix projected revenues between $2.19 billion and $2.23 billion. The Zacks Consensus Estimates for the same stands at $2.22 billion, indicating an increase of 4.18% from the year-ago period's reported figure. EQIX estimated adjusted EBITDA in the range of $1.01-$1.05 billion for the first quarter. Our estimate is pegged at $1.05 billion, implying a year-over-year increase of 5.9%. Equinix, Inc. Price and EPS Surprise However, high interest expenses might have partly impeded the company's quarterly performance. For the first quarter of 2025, our estimate for interest expenses implies a year-over-year increase of 10.9%. EQIX's activities during the to-be-reported period were inadequate to garner analysts' confidence. The Zacks Consensus Estimate for quarterly AFFO per share has been revised southward by 5 cents to $8.96 over the past month. However, it suggests a 1.13% increase from the prior-year quarter's reported figure. (See the Zacks Earnings Calendar to stay ahead of market-making news.) What Our Quantitative Model Predicts for EQIX Our proven model predicts a surprise in terms of AFFO per share for Equinix this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an AFFO beat, which is the case here. Equinix currently has an Earnings ESP of +1.41% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. Other Stocks That Warrant a Look Here are two other stocks from the broader REIT sector - Welltower WELL and Healthcare Realty Trust Incorporated HR- that you may also want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter. Welltower, slated to release quarterly numbers on April 28, has an Earnings ESP of +1.69% and carries a Zacks Rank #2 at present. You can see the complete list of today's Zacks #1 Rank stocks here . Healthcare Realty Trust Incorporated, scheduled to report quarterly numbers on May 1, has an Earnings ESP of +0.16% and carries a Zacks Rank of 3. Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Equinix, Inc. (EQIX) : Free Stock Analysis Report Healthcare Realty Trust Incorporated (HR) : Free Stock Analysis Report Welltower Inc. (WELL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research